\nVAST RESOURCES, formerly known as African Consolidated Resources (ACR), has injected more than US$7 million in the construction of its new gold mining venture in Chegutu, marking its full transformation from an exploration company to a fully-fledged mining concern. The Pickstone-Peerless gold mine, which is jointly owned by Dallaglio Investments, a special purpose vehicle established between Vast Resources and Grayfox Investments — a consortium of local investors — is set to make its first gold sales this month.
Under the current arrangement, Grayfox has the right to exchange its shareholding in Dallaglio for 288 million shares in Vast Resources, which would see the latter taking full ownership of the project subject to indigenisation regulations.
Pickstone-Peerless, which is situated 100 kilometres south-west of Harare and 20 kilometres outside Chegutu, becomes Vast Resources flagship gold venture after the company failed to acquire Falgold's Dalny Mine in a protracted US$8 million deal last year.
The miner's chief executive officer, Mr Roy Pitchford, said last week a "completely new mine has been constructed — nothing of the old mine remains".
"The capital investment has amounted to US$4 million with an additional US$3 million for working capital. The funds were obtained from Zimbabwe investors for the capital, and a Zimbabwe bank for the working capital.
"The Zimbabwe investors invested share capital and the bank provided debt," said Mr Pitchford.
\nAfter accessing the funds, construction of the new mine processing facilities began in February this year and open cast mining operations resumed five months later.
Also, the crushing circuit was commissioned in July 2015, while the milling and Carbon in Pulp (CIP) facilities were commissioned in August 2015.
CIP is an extraction technique for the recovery of gold which has been liberated into a cyanide solution as part of the gold cyanidation process.
\nThe mine is targeting to produce 10 000 ounces or 283 kilogrammes of gold per annum.
There are plans to grow the mine into the biggest gold mining operation in the country in the long term.
\nPrices of gold are however trending lower on the international market, dropping to US$1 102 per ounce on Tuesday on low demand from China, a top consumer of the metal.
The yellow metal peaked to U$1 921.41 per ounce in August 2011.
\nGovernment has been actively trying to accommodate gold miners.
Recently, the royalty for small-scale gold miners was cut to 1 percent from 3 percent to enhance viability of the sector.
\nAccording to Mr Pitchford, low gold prices, which are expected to reduce profitability, call for additional cost-cutting measures.
"The lower gold price is manageable to some extent. Strict cost controls, deferring capital expenditure and increasing production to spread fixed costs over larger volumes are some of the measures the company can undertake.
"The quality of the mineral resources of Zimbabwe will always be attractive to international investors because mineral and metal prices will eventually go up," explained Mr Pitchford, adding that there was need for the indigenisation and economic empower regulations to be rationalised.
"Zimbabwe is internationally recognised as having many world-class mineral deposits (and) . . . was once a very favourable mining investment destination, especially at the time of the development of Zimplats.
\nZimbabwe targets to produce 16,7 tonnes of gold this year after realising 13,9 tonnes of gold last year.
In the first six months of this year, gold deliveries rose 37 percent to nearly 8,2 tonnes, driven by increased output from both large and small-scale producers.
Vast Resources has numerous other operations in Zimbabwe such as the Gadzema gold project, the Chishanya phosphate project and the Perseverance nickel operation.